What Is an Industry Code of Practice? A Guide for Australian Businesses

When you’re running a business in Australia, it’s not just about delivering great products or services - it’s also about doing things the right way, consistently. Industry codes of practice are a big part of that picture. They set standards for fair dealing, safety and transparency, and help you show customers, regulators and partners that you operate professionally.

If you’ve been asking “what is a code of practice?” or wondering whether your business needs to comply with one, you’re in the right place. In this guide, we’ll explain what industry codes are, how they work in Australia, which ones you might come across, and the practical steps to get compliant and stay that way.

Think of this as your plain-English roadmap to codes of practice - so you can reduce risk, build trust and keep growing with confidence.

What Is a Code of Practice in Australia?

An industry code of practice (often just called a “code”) is a set of rules, standards or guidelines that businesses in a particular sector agree to follow. The purpose is to lift industry standards - things like fair trading, disclosure, safety, complaint handling and consistent service quality.

In Australia, codes of practice come in different forms:

• Some are mandatory because they’re made under legislation - if a mandatory code applies to you, you must comply.
• Some are voluntary - you “opt in,” often via your industry body, and then you’re expected to meet the standards you’ve signed up to.
• Some are practical guidance documents (like Work Health and Safety model codes of practice) that show you one accepted way to meet your legal duties.

Even where a code itself isn’t a law, regulators and courts can use it as a benchmark for what good practice looks like. That means codes can be influential in deciding whether conduct was appropriate, fair or safe in a particular situation.

Mandatory vs Voluntary Codes (And Where WHS Codes Fit)

Mandatory industry codes

Mandatory codes are made under legislation - for example, under the Competition and Consumer Act 2010 (Cth). If your business falls within the scope of a mandatory code, you must comply. Failure to do so can lead to enforcement action, penalties and court orders.

Common features of mandatory codes include clear rules about information disclosure, fair contract terms, dispute resolution processes, and timelines for handling issues. Because they’re law-backed, these codes are actively enforced by regulators.

Voluntary industry codes

Voluntary codes are developed by industries to set a higher bar than the legal minimum. Businesses choose to sign up (often as part of association membership) and commit to things like service standards, fair complaints handling and responsible marketing.

While voluntary codes aren’t directly enforceable by law, they still matter. If a dispute arises, a regulator or court may look at a voluntary code to assess whether your conduct was appropriate. And, if you’ve signed a membership agreement that requires compliance, breach of the code can still carry consequences (for example, losing accreditation or membership).

WHS model Codes of Practice

Work Health and Safety (WHS) model Codes of Practice provide practical guidance on how to meet your duties under WHS laws. They are not laws themselves. However, they are admissible in court and can be relied on as evidence of what is known about hazards, risks and controls. If you don’t follow a WHS code, you must achieve an equal or better standard by another effective method.

Following a WHS code is one of the clearest ways to demonstrate you’re meeting your duty of care to workers, contractors and others in your workplace.

Common Codes Australian Businesses Encounter

Here are some of the key codes you may come across as an Australian business owner. Which ones apply will depend on your industry and business model.

Mandatory codes

• Franchising Code of Conduct: Applies to franchisors and franchisees. It sets rules about disclosure, good faith, cooling-off, marketing funds, dispute resolution and ending franchise agreements.
• Horticulture Code of Conduct: Regulates trading relationships between growers and traders in the horticulture sector, including contract and payment requirements.
• Oil Code of Conduct: Governs arrangements in the downstream petroleum industry (for example, franchise and fuel re-selling relationships).
• Dairy Industry Code of Conduct: Sets minimum standards of conduct in the dairy industry, including written agreements and dispute processes between farmers and processors.

Voluntary or industry-administered codes

• Food and Grocery Code of Conduct: A voluntary code focused on fair dealing in the grocery supply chain. Large supermarkets are signatories, and the code sets standards for negotiating, contracting and managing supplier relationships.
• Industry association codes: Many sectors (for example, real estate, financial services, digital advertising and community services) adopt voluntary codes and accreditation schemes to lift standards and consumer trust.

WHS model Codes of Practice

• Examples include: Managing risks of hazardous chemicals, manual handling, working at heights, managing risks in construction, preventing workplace bullying and more. These guides explain practical steps to meet WHS obligations appropriate to your sector and tasks.

Privacy and data handling

• Notifiable Data Breaches scheme (Privacy Act): This isn’t a “code” - it’s a legal scheme that requires eligible entities to assess and notify certain data breaches to affected individuals and the OAIC. It sits alongside the Australian Privacy Principles (APPs).
• Credit Reporting Privacy Code: A registered code under the Privacy Act that binds organisations engaged in consumer credit reporting.

Beyond the above, you may also need to observe general laws that function like “baseline codes” for every business, such as the Australian Consumer Law (ACL) on misleading or deceptive conduct, unfair practices and product safety. For example, Section 18 of the ACL prohibits misleading or deceptive conduct in trade or commerce, which affects your advertising, website copy and claims you make to customers. See more on Section 18 and how it applies in day-to-day operations.

How Do I Comply With an Industry Code of Practice?

Compliance is easier when you break it into steps. Here’s a practical approach that works for most businesses.

1) Identify the codes that apply

Start with your business activities. Ask: which industries do we operate in, and who do we deal with? Then check whether there are mandatory codes for those relationships (for example, franchising or particular supply chains), and whether your industry association administers any voluntary codes that your customers expect you to follow.

Don’t forget WHS model codes relevant to your workplace risks. They’re a powerful way to evidence compliance with safety duties if an incident occurs.

2) Read the code in full and extract the obligations

Go beyond the summary. Note specific obligations around disclosure, record-keeping, complaint handling, timelines, signage, safety procedures and staff training. Convert these into a simple, business-friendly checklist you can track.

3) Map code requirements to your processes

For each requirement, decide where it “lives” in your business. That might mean updating your sales process, onboarding templates, safety checks, supplier agreements or website content. Writing things down helps - your team will know what good looks like and you’ll have an audit trail.

4) Update your contracts and policies

Most codes assume you’ve set clear expectations with customers, suppliers and workers. This is where well-drafted documents do heavy lifting - for example, your Customer Contract and website terms can set fair refund, delivery and complaint rules, while a current Privacy Policy and internal procedures help you meet data obligations under the Privacy Act.

5) Train your team and embed habits

Codes often require you to handle complaints within certain timeframes, follow safety steps before high-risk work, or disclose certain information before customers sign. Build these into checklists and scripts so frontline staff can follow them consistently.

6) Keep records and review regularly

Good records are your best friend if a regulator asks questions. Keep copies of disclosures, signed acknowledgements, complaints logs, training attendance and safety checklists. Review your compliance annually, or sooner if the law, your code or your business model changes.

Do I Need To Change My Business Structure To Comply?

Usually, codes don’t force a particular business structure. However, certain industries or activities might require a company entity for licensing, risk management or contract counterparties (for example, some franchisors require franchisees to trade through a company).

If you operate with co-founders or investors, it’s also a good moment to document governance and roles clearly. A Shareholders Agreement can set decision-making rules, share transfers, dispute pathways and protections - which helps you meet any code expectations around transparency and accountability inside your business.

What Legal Documents Support Code Compliance?

Putting the right contracts and policies in place makes day‑to‑day compliance far simpler. The exact list will depend on your industry, but many businesses benefit from the following:

• Customer Contract or Terms and Conditions: Sets clear rules for service scope, pricing, delivery, warranty, refunds and complaints. These terms should align with the ACL and any industry code obligations you’ve adopted.
• Website Terms & Conditions: If you sell or take bookings online, terms on your site should match your legal and code obligations, including product descriptions and refunds.
• Privacy Policy: Explains what personal information you collect, how you use it and how customers can access or correct it - essential for Privacy Act compliance and useful for many codes that expect strong data practices. Consider a tailored Privacy Policy if you handle sensitive or high-volume data.
• Complaint Handling Procedure: Some codes specify timeframes and processes for resolving complaints. A short, documented procedure helps the team respond consistently and meet those timelines.
• Employment Contract and Workplace Policies: Your people need clear expectations around conduct, safety and training. An Employment Contract and appropriate policies support compliance with WHS duties and any code standards (for example, incident reporting or mandatory training).
• Supplier or Distributor Agreements: Codes often touch trading relationships - things like fair payment terms, dispute resolution and quality standards. Your contracts should reflect these obligations so the supply chain supports your promises.
• Franchising Documentation (if relevant): If you franchise, your agreements and disclosure documents must meet the Franchising Code. Working with a franchise lawyer ensures your documents and processes align with the Code from day one.

You may not need all of these, but most businesses covered by a code will need several. The aim is to make compliance part of “how we do things here,” rather than a last-minute scramble when something goes wrong.

What Happens If I Don’t Comply With a Code of Practice?

The consequences depend on the type of code and the conduct in question.

Mandatory code breaches

Where a code is mandatory (law-backed), non-compliance can lead to investigations, infringement notices, court action and civil penalties. Regulators can also seek orders requiring you to change practices, compensate affected parties or publish corrective notices.

Voluntary code breaches

If you’ve opted into a voluntary code and don’t follow it, you might face consequences under your membership or accreditation rules (for example, suspension or removal). Importantly, your conduct can still be assessed under general laws - for example, if your marketing over-promises, you may be at risk under the ACL even if the voluntary code itself isn’t enforceable.

WHS model codes and safety duties

WHS model codes are not offences in themselves, but they are strong evidence of what “good practice” looks like. If an incident occurs and you didn’t follow a relevant WHS code (or achieve an equivalent level of safety another way), you may have difficulty showing you met your duty of care.

All of this is why it pays to treat codes seriously: they reduce legal risk, make your operations more consistent, and build trust with customers and workers.

Key Takeaways

• Industry codes of practice set standards for fair dealing, safety and transparency - some are mandatory by law, others are voluntary, and WHS model codes provide practical guidance.
• If a mandatory code applies to your business (for example, in franchising, dairy, horticulture or oil), you must comply or face enforcement and penalties.
• Voluntary codes and WHS model codes still matter: regulators and courts use them as benchmarks for appropriate conduct and safety practice.
• Compliance is easier when you identify relevant codes, translate obligations into checklists, update your documents and processes, train your team and keep good records.
• Core documents like a Customer Contract, Website Terms, a current Privacy Policy, an Employment Contract and clear complaint procedures make code compliance part of everyday operations.
• Treat codes as tools to reduce risk and build trust - they’re not just a legal hurdle, they’re a framework for running a better business.

If you’d like a consultation on navigating industry codes of practice for your Australian business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.